Re: [OPE-L] what is irrational in the functioning of capitalism?

From: ajit sinha (sinha_a99@YAHOO.COM)
Date: Tue Dec 05 2006 - 06:07:05 EST

--- ajit sinha <sinha_a99@YAHOO.COM> wrote:

> ___________________________
> Paul, I don't understand why you are introducing
> irrelevent stuff into a simple argument. for
> simplicity sake let's take a one commodity corn
> economy:
> 1 ton of corn + 8 hrs. of labor --> 8002 tons of
> corn
> wages = 1 ton of corn for a day, i.e. 8 hrs. of
> labor.
> What is the rate of profit in the system?
> Rare of Profit = 8000/2 = 4000%
> What is the value of 1 ton of corn?
> Value of 1 ton of corn = 8/8001 hrs. of labor
> Surplus value = 8 - 8/8001 hrs. of labor
> Rate of surplus value = (64008 - 8)8001/(8001x8)
I think this is not a very good example of my
argument--one should not develop examples late at
night. In any case, it would be better to have the
production system depicted as:
4000 tons of corn + 8 hrs. of labor --> 8002 tons of
In this case the rate of profits would be 100%. Now if
you keep adding zeros on both sides of the arrow for
corn, the rate of profit will remain around 100% but
your labor value of corn will be disappearing and the
rate of surplus value would be sky rocketing. In other
words, the argument that the sourse of profit is in
surplus labor will break down. You see, the problem is
this. Before Marx no political economist had a good
theory of profit (except for taking surplus as gift of
nature). It is Marx's great originality that he tries
to develop a proper theory of profit determination (an
originality for which Marx is not given proper credit
because of Marx influenced reading of Ricardo). Now to
do so, Marx first develops a so-called theory of value
where commodities are supposed to exchange according
to their labor content. From this proposition he
derives a particular exchange relation of real wages
with labor-power and discovers the source of surplus
production in surplus labor. Then this surplus labor
so derived from the equal value exchange proposition
is used to develop the rate of profit. But once the
rate of profit is introduced in the argument, he had
to acknowledge that equal value exchange proposition
must be discarded. But once you discard that the
logical foundation for the theory of profit collapses.
Cheers, ajit sinha

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